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New Techniques in Federal Aid

Published online by Cambridge University Press:  02 September 2013


The need for federal supplementation of state and local funds in carrying on certain relief and work activities will undoubtedly continue, and even expand, in coming years. Although the economic and fiscal problems arising out of this situation usually receive the spotlight, the administrative aspects are no less important. To a large extent, the effectiveness of the programs of federal financial aid is determined by the administrative arrangements under which the funds are distributed and spent. To the political scientist, therefore, federal participation since 1933 in “normal” state and local public construction and in work programs designed for the needy unemployed is of particular interest, because in these instances profound modifications have been made in the traditional procedures for administering federal aid.

It is interesting to reflect that the changes which have taken place in federal aid techniques since 1933 came quickly and without warning. The administrative set-up of federal aid activities appeared to have achieved a rather stable and permanent form during the second decade of the twentieth century. Certain outstanding characteristics could be noted in the federal subventions then being offered. The term “federal aid” referred to annual, recurrent lump grants made by the federal government to participating state governments. Each state legislature wishing to take advantage of federal aid for a particular function would first set up or designate a state agency with power to perform the work involved. The state agency, in turn, would periodically draft a program to be submitted to the federal government for its approval.

American Government and Politics
Copyright © American Political Science Association 1940

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1 See, for example, the findings of Joseph P. Harris on the financial prospects of state and local governments, in “The Need for Federal Support of Social Security Programs,” Part VI of Social Security in America, published for the Committee on Economic Security by the Social Security Board (Washington: Government Printing Office, 1937).

2 N. I. R. A. Act of 1933, Title II (48 Stat, L. 200, ch. 90).

3 An intermediate step, which in a sense bridged the gap between the old grant-in-aid methods and the P. W. A. procedure, was the Emergency Relief and Construction Act of 1932, Title II (47 Stat. L. 709), under which loans were made available to states and their political subdivisions for “self-liquidating” construction projects.

4 Some observers may suggest that a state public works agency could borrow the W. P. A. technique of approving a large “pool” of acceptable projects. From this “pool” the agency might select for actual operation only the particular projects most needed at the time. However, P. W. A. projects do not lend themselves so well to this scheduling as do W. P. A. undertakings. Localities often have to make elaborate preparations for P. W. A. projects—changing local debt limits, holding special elections, floating bond issues, paying considerable amounts for architectural and engineering blueprints—and they wish to be sure that every approved P. W. A. project will be carried out.

5 This is in accord with the legal theory behind all grants-in-aid. See, for example, State of Wyoming, ex rel. Wyoming Agricultural College et al. v. William C. Irvine, 206 U. S. 278 (1907); King's County v. Seattle School District No. 1, 263 U. S. 361 (1925).

6 There were some instances where localities were permitted to carry on certain P. W. A. project work by force-account (day labor) instead of by the letting of contracts. See Williams, J. Kerwin, Grants-in-Aid Under the P. W. A. (New York, 1939).Google Scholar

7 Under the N. I. R. A., 30 per cent of the cost of labor and materials; under the 1935 and later acts, 45 per cent of total costs of a project.

8 The general reluctance of all grant agencies to withhold grants from states is well discussed in Key, V. O., The Administration of Federal Grants to States (Chicago, 1937), Chap. 6.Google Scholar Thus the power of withholding funds is by no means the important sanction that it appears to be. The occasional tendency of Congress to restore to a state a grant withheld for cause by the administrative branch complicates the problem still further.

9 For a description of this agency, see Gill, Corrington, “The Civil Works Administration,” Municipal Year Book, 1937, p. 420Google Scholar; and Williams, E. A., Federal Aid for Relief (New York, 1939), pp. 111124.Google Scholar

10 There was no requirement that state or local funds should be provided to “match” the federal contribution for C. W. A. projects. Project sponsors usually paid supervisory expenses and part of the costs of materials, however, and also provided tools and equipment.

11 Confusion in the public mind arose from the fact that certain personnel played a dual rôle. In their capacity as state officials, they handled grants from the F. E. R. A.; they were also sworn in as federal officials to conduct the federal work program of the C. W. A.

12 At the peak of the program (week of January 18, 1934), C. W. A. projects were employing 4,260,000 persons, of whom about 2,000,000 were able-bodied persons from relief rolls and the remainder were persons who had been unemployed but without relief status.

13 Federal Emergency Relief Appropriation Act of 1933 (48 Stat. L. 55, ch. 30).

14 The serious difficulties of the P. E. R. A. in getting certain states to observe even a 30-cent-per-hour minimum work relief wage are discussed in Edward A. Williams, op. cit., Chap. 3. Certain groups in the states were opposed in principle to raising relief standards, even when almost all the money spent by the state and local relief organizations came from federal sources. See Key, op. cit., p. 364.

15 The Works Progress Administration was set up under Executive Order No. 7034, May 6, 1935 (issued under authority of the Relief Appropriation Act of 1935), for the purpose of providing public employment for as many as possible of the 3,500,000 able-bodied workers on emergency relief rolls in 1935. On July 1, 1939, the W. P. A. (renamed Work Projects Administration) was grouped in the newly organized Federal Works Agency. For a brief general description of the W. P. A., see Ross, Emerson, “Works Progress Administration,” Municipal Year Book, 1937, pp. 433 ff.Google Scholar The agency issues full periodic reports entitled Report on Progress of the W. P. A. Program, the latest of which covers the fiscal year ending June 30, 1939.

16 The “matching” requirements of ordinary grant statutes are not applied to the W. P. A. program. Project sponsors have from the beginning, however, contributed a substantial and increasing share of project costs; the 1939 relief act requires that project sponsors within each state shall bear at least 25 per cent of the total cost of all non-federal W. P. A. projects approved after January 1, 1940.

17 It should not be overlooked, however, that the “short-circuiting” of state governments, however desirable it may be for a successful work program, conflicts with a general trend from local to state management in the field of public welfare. This tendency is being reinforced by federal grants-in-aid to the states, fostering integration on the state level of certain public assistance activities. The use of direct federal-local contacts on work programs therefore renders more difficult the achievement of coördinated relief and work programs within the states.

18 On the W. P. A. program, at least 95 per cent of project employees must be persons certified as in need of relief. In practice, the percentage of certified workers has been about 97 per cent. The non-certified workers are usually supervisors or necessary technical persons who could not be supplied from relief rolls.

19 See Williams, Edward A. and Williams, J. Kerwin, “The W. P. A. vs. Grants-in-Aid,” Survey Midmonthly, Vol. 76 (March, 1940), pp. 91 ff.Google Scholar

20 For testimony on the greater effectiveness of the W. P. A. method, see Millett, John D., The Works Progress Administration in New York City (Chicago: Public Administration Service, 1938), p. 215.Google Scholar

21 Under the appropriation act of 1939, Congress restricted the W. P. A. to $50,000,000 (less than 3.4 per cent) for administrative expenses, necessitating the severe cutting of the administrative staff at Washington and in the field. A still greater reduction in the funds available for administration was made in the relief act for the fiscal year 1941—$41,534,000 for the year, and $30,875,000 if the total appropriation is spent in an eight-month period.

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